Missouri New Jobs Tax Deduction

As you may have heard, Missouri Governor Jay Nixon recently signed into law House Bill 1661, a bill that expands tax deductions for small businesses.

House Bill 1661 provides small businesses a Missouri tax deduction of $10,000 for each new qualifying job they create, provided the job pays at least the county average wage or the state average wage (whichever is lower). If the job also offers health insurance, and the employer pays at least 50 percent of the premium, the business can receive an additional $10,000 tax deduction.

To be eligible, the small business must have 50 employees or fewer, and the new jobs created must employ the workers for at least 52 weeks. Businesses are eligible to claim the deduction during tax years 2012, 2013 and 2014.

Sole proprietors, partnerships, C corporations, S corporations, limited liability companies, limited liability partnerships and other business entities are all eligible for the New Jobs Deduction if they meet all other qualifying criteria. The deduction may be taken when filing your individual income tax return or corporate income or franchise tax return for the deduction year. The form "Small Business Deduction For New Jobs Under Section 143.173, RSMo" (MO-NJD) must be attached to your tax return. The MO-NJD may be found athttp://dor.mo.gov/forms/MO-NJD.pdf.

If you have questions regarding the tax impact of this new provision, please feel free to contact one of our professionals here at Pritchard Osborne.